Can Bank Fees Be Tax Deductible

ENABLES IT GROUP PLC – Final Results.

                                                               22
February 2013
                             Enables IT Group plc
                         ("Enables" or "the
Company")
                       (formerly Nexus Management Plc)
              Final results for the year ended 30 September 2012 

The Board of Enables IT Group plc, the AIM quoted provider of
network and IT solutions, is pleased to announce its final results for
the year ended 30
September
 see month.
 2012.

Highlights:

– Adjusting for the
discontinued operations

:

– Turnover increased by [pounds sterling]148,000 to [pounds
sterling]4.27 million (2011: [pounds sterling]4.12 million)

– Operating profits (before exceptional items) increased by [pounds
sterling]70,000 to [pounds sterling]352,000 (2011: [pounds
sterling]282,000)

– Disposal of US
operating subsidiary

,
Resilience
,
n
 Technology
Corporation (”
RTC

“)

Post-period Highlights

– Nexus Management Plc completes acquisition of Enables IT Limited
by way of
reverse takeover

 

Michael
  [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God’s presence.
 Walliss, Chief Executive Officer, commented:

 "These results reflect the position of the group prior to the
successful acquisition of Enables IT. The integration of the two
businesses has been a key focus in the last few months and I am
delighted with the progress we have made and thank all those involved.
We look forward to completing the integration phase and implementing our
growth strategy, which subject to stable market conditions, should
deliver strong improvements in the group's returns in 2013 and
beyond." 

This announcement has been extracted from the accounts. The full
Report and Accounts can be found on the Enables website at
www.enablesit.com

  FURTHER ENQUIRIES
 Enables IT Group plc Michael Walliss                     Tel: 01372 455
970
Merchant Securities Limited (Nominated Adviser) Simon Clements / David
Worlidge     Tel: 020 7628 2200
Peterhouse Corporate Finance (Broker) Jon Levinson
Tel: 020 7562 3351 

NON-EXECUTIVE CHAIRMAN’S STATEMENT

I am pleased to announce a small increase in revenue compared with
the previous year during this challenging period, with a larger increase
in operating profits before exceptional items
owing to

prep.
Because of; on account of:

 prep → ,  
 various cost

restructuring

 throughout the Group. As previously announced the Board
carried out a strategic review resulting in a number of changes to the
existing Board and the appointment of a new Executive Director – Michael
Walliss.

During the year, following a review of all the trading activities,
it was decided
to dispose of

 the US operating subsidiary Resilience
Technology Corporation (RTC) to allow the Group to
refocus

 on core IT
Services. The disposal also removed certain liabilities and reduced
exposure to long standing creditors. The acquirers were the RTC
management team and the deal completed in the summer of 2012.

 Focus was then directed towards the completion of the reverse takeover
of Enables IT Limited, of which Michael Walliss was the majority
shareholder and Managing Director. It was considered a good strategic
fit with the current group and management team and brought high level
technical skills which are expected to assist in strong future growth. 

Finally, I would like to thank the management team and all staff for
their continued support and we look forward to the year ahead.

 M Barney Battles Non-Executive Chairman 

CHIEF EXECUTIVE OFFICER’S STATEMENT

Introduction

 Although I was appointed CEO on the conclusion of the successful
reverse takeover at the end of November 2012, I formally joined the
Board at the beginning of July 2012 as an Executive Director. This
allowed me to review the company performance and the group structure
both here in the UK and in the US in readiness for the takeover
transaction. We identified a number of challenges that needed immediate
attention within the group structure, particularly around the commercial
arrangements of managed service contracts, the data centre offering
(colocation and cloud services) and staff performance. Additionally, the
structure of the data centre in the US needed some upgrades to the
environment to ensure we could deal with the current load on the
facility with power and cooling. The cloud platform needed further
technical design and investment to optimise performance and de-risk
outages ensuring our customer's business needs could be met.
Happily most of these areas have been dealt with and I am pleased to say
both management teams in the UK and US are performing well since this
initial review.
One of the reasons for wanting to undertake the reverse takeover was to
have the opportunity to raise funds to help us undertake a number of
strategic acquisitions. The investment will help us accelerate a full
service offering, enhancing the group's technical capabilities and
attract new larger corporate customers. This will strengthen the
business and minimise our reliance on a small number of existing large
customers, and through delivery of increased profits, will create real
value for our shareholders. 

Review of Activities

 Following on from the successful takeover, we ended the year by
relocating our head office and operation facility to a newly developed
building in Leatherhead, Surrey. Having worked on this facility
designing the layout and the structure to a budget that was set at the
end of May last year, I am very pleased to say the facility is what we
hoped and expected. The centre has been designed to ensure we can
deliver all our helpdesk and technical services from one location in the
UK. As we move forward and continue the integration with our US managed
service, both operations will allow us to offer a fully 24/7 global
support managed service desk and technical implementation skills that
will be able to compete with the best in our industry. The UK
operational centre has growth capability to allow us to quadruple the
size of our managed service desk and double our professional services
and project management teams along with a technical benching testing and
development room for our customers to see their future technology in
action.
With the operational and head office function established in Surrey, we
decided to maintain the previous head office facility in Moorgate,
London to continue the development of our Sales and Marketing team. The
team has been operational from this facility since the beginning of
January 2013 and initial focus will be on brand alignment and enhancing
awareness, strengthening customer relationships across the group and
attracting new opportunities and customers. Whilst we anticipate current
market conditions will be challenging, we are committed to ensure
organic growth is continued and deal with the opportunities that will
come from our anticipated acquisitions.
Following on from the takeover transaction we have changed a number of
roles within the business and also created a few new ones to ensure the
company structure continues to be effective and positioned to deal with
future growth. This is well advanced and continues to deliver the
efficiencies that were identified in advance of the takeover.
In the last six months we have strengthened our US data centre by
further investment in our cloud platform 'HAVEN', and are
seeing further good growth by new and existing US customers. Our focus
is to change previous arrangements by using the majority of HAVEN as
colocation and transferring the data centre to a fully cloud platform
offering. We believe this will not only be financially beneficial to
existing and new customers, but will offer up to 100% uptime and present
a solution to changing data storage compliance. To compliment this
offering and having already launched our UK Cloud platform in November
2012 through our Tier 1 Partner in London, our focus and future
development will be to have both data centre platforms fully replicated.

To
compliment

 this strategy we now have
accreditation

n a process of formal recognition of a school or institution attesting to the required ability and performance in an area of education, training, or practice.
 with world
leading technology partners with
EMC

 (Data Storage),
VMWare

 (
Cloud
 aggregation of minute particles of water or ice suspended in the air.
Formation of Clouds

Clouds are formed when air containing water vapor is cooled below a critical temperature called the dew point and the resulting moisture condenses into
 Virtualisation Software),
Microsoft

 (Business
Operating Systems

), Cisco
(Network and Security), Good (
BYOD

BYOD Bring Your Own Dessert
BYOD Buy Your Own Drinks
 – Secure Mobility solutions), Meru
(Wireless Infrastructure), to name but a few.

Financials

As reported by the Chairman, during the year the group
disposed
  
v. dis·posed, dis·pos·ing, dis·pos·es

v.tr.
1. To place or set in a particular order; arrange.

2.
 of
Resilience Technology Corporation (RTC), therefore the operating
financial statements only reflect the continuing group operations and
not RTC which is shown as a
discontinued operation

A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations.
.

The turnover increased by [pounds sterling]148,000 (3.6%) to [pounds
sterling]4.3m with operating profits (before exceptional items) growing
by 25% to [pounds sterling]352,000.

 As shown in note 5 exceptional items were made up of two main
contributing factors. The reconstruction of the Board accounted for
[pounds sterling]264,000 (including compromise agreements and associated
legal fees), and the acquisition costs relating to Enables IT Limited.
Excluding these main exceptional items and the profit from discontinued
operations ([pounds sterling]163,000), the stated loss before taxation
of [pounds sterling]103,000 would have resulted in a net profit before
taxation of [pounds sterling]263,000 (6%). The company generated [pounds
sterling]378,000 of cash during the year of which [pounds
sterling]262,000 was generated from operating activities.

Whilst the majority of the trading year was spent on restructuring
the group and board changes, the Group’s operations continued to
trade in line with management expectations.

Outlook

 The consolidation of the Group is nearing completion and is expected to
be finalised by the end of March 2013 enhancing the Group's service
capabilities. The full integration of both the US and UK Managed Service
Desk offering a true world-wide dedicated 24/7 support and monitoring
service. This will not only strengthen the Group's profitability by
driving up efficiencies, but will allow the group marketing
opportunities to a wider audience due to better in house capabilities
with dedicated resource. 

To support the development of the Group the Board continues to look
to strengthen our Sales and Marketing department by the
recruitment
 /re·cruit·ment/ ()
1. the gradual increase to a maximum in a reflex when a stimulus of unaltered intensity is prolonged.

2.
 of a
senior individual.

As part of the reverse takeover strategy we are committed to not
only growing our business organically, but through selective
acquisitions both in the UK and US. The implementation of this strategy
is already well advanced.

In addition to this, we continue to work closely with one of our
major client’s to conclude a longer term contractual situation that
will be beneficial to them and to the Group. The reliance on this one
customer has now been significantly reduced following the successful
reverse takeover.

Trading for the current financial year has started well considering
the integration process and is in line with management’s
expectations.

 Michael Walliss Chief Executive Officer
 GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER
2012
                                                     30
30
                                              September
September
                                                   2012
2011
                                                      [pounds sterling]
(Restated) [pounds sterling] Continuing operations           Notes
Revenue                           4           4,273,614
4,125,434
Cost of sales                               (2,381,454)
(2,261,130)
Gross profit                                  1,892,160
1,864,304
Operating expenses excluding exceptional expenses
(1,540,236)           (1,582,669)
Operating profit before exceptional items
351,924               281,635
Exceptional items                 5           (554,931)
(16,705)
Operating (loss)/profit                       (203,007)
264,930
Finance costs                     6            (62,470)
(96,244)
(Loss)/profit before tax                      (265,477)
168,686
Tax                               7                   -
-
(Loss)/profit for the year from continuing operations
(265,477)               

168,686

 Discontinued operations Profit/(loss) for the year from discontinued
operations                         162,945             (283,172)
Loss for the year                             (102,532)
(114,486)
Attributable to equity holders of the parent
(102,532)             (114,486) Loss per share Basic and diluted
8           (0.0087)p             (0.0102)p Continuing operations basic
and diluted                       8           (0.0087)p
(0.0102)p 

The
accompanying
  
v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies

v.tr.
1. To be or go with as a companion.

2.
 accounting policies and notes form an integral part
of these financial statements.

STATEMENT OF CHANGES IN EQUITY
ATTRIBUTABLE

 TO THE EQUITY
SHAREHOLDERS OF THE PARENT FOR THE YEAR ENDED 30 SEPTEMBER 2012

                                 Share               Foreign
Share
                      Share   premium    Retained  exchange   Other
options Group               capital   account    earnings   reserve
reserve reserve     Total
                          [pounds sterling]         [pounds sterling]
[pounds sterling]         [pounds sterling]       [pounds sterling]
[pounds sterling]         [pounds sterling]
As at 1 October
2010              2,748,738 5,029,843 (8,537,778)  (99,595)  38,876
944,398
  124,482 Loss for the year         -         -   (114,486)         -
-       - (114,486) Movement in the year                      -
-           -  (20,424)       -       -  (20,424) Shares issued
107,142    42,857           -         -       -       -   149,999
Convertible loan notes                     -         -           -
-       -       -         - Share based payment charge
-         -           -         -       -  26,681    26,681 As at 30
September 2011    2,855,880 5,072,700 (8,652,264) (120,019)  38,876
971,079

166,252

 As at 1 October 2011              2,855,880 5,072,700 (8,652,264)
(120,019)  38,876 971,079
  166,252 Loss for the year         -         -   (102,532)         -
-       - (102,532) Movement in the year                      -
-           -     5,921       -       -     5,921 Shares issued
93,750    56,250           -         -       -       -   150,000
Convertible loan notes                     -         -           -
-       -       -         - Share based payment charge
-         -           -         -       -   1,795     1,795 As at 30
September
2012              2,949,630 5,128,950 (8,754,796) (114,098)  38,876
972,874   221,436 

GROUP BALANCE SHEET AS AT 30 SEPTEMBER 2012

                                                                   30
30
                                                           September
September
                                                                2012
2011
                                                                   [pounds sterling]           [pounds sterling] ASSETS
Notes Non-current assets Property, plant and equipment
9       255,789     309,660 Intangible assets
11             -     633,910 Goodwill
10             -     668,810
                                                             255,789
1,612,380 Current assets Inventories
13             -     412,941 Trade and other receivables
14       294,844     410,976 Cash and cash equivalents
787,238     409,391
                                                           1,082,082
1,233,308
Total assets                                               1,337,871
2,845,688 LIABILITIES Current liabilities Trade and other payables
15     (698,961) (1,752,623) Loans and other borrowings
16             -   (206,362) Obligations under finance leases
17      (41,263)    (61,806)
                                                           (740,224)
(2,020,791) Non-current liabilities Trade and other payables
15             -    (68,688) Loans and other borrowings
16     (355,293)   (529,761) Obligations under finance leases
17      (20,918)    (60,196)
                                                           (376,211)
(658,645)
Total liabilities                                        (1,116,435)
(2,679,436)
Total assets less liabilities                                221,436
166,252 EQUITY Shareholders' equity Called up share capital
18     2,949,630   2,855,880 Share premium
5,128,950   5,072,700 Other reserves
897,652     889,936 Retained earnings
(8,754,796) (8,652,264)

Total equity attributable to the equity holders of the parent

                                                   221,436     

166,252

GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2012

                                                           30        30
                                                   September September
                                                        2012      2011
                                                           [pounds
sterling]         [pounds sterling] CONTINUING OPERATIONS Cash flows
from operating activities Loss before tax
(102,532) (114,486) Adjustments for: Interest paid
171,258   240,494 Amortisation of customer list
38,477   271,619 Profit on disposal of subsidiary
(33,630)         - Depreciation
93,840   111,170 Currency exchange adjustment
(3,512)  (31,113) Operating cash flows before movements in working
capital                                      163,901   477,684 Share
option costs                                     1,795    26,681
Increase in inventories                                (896)  (36,659)
Decrease in trade and other receivables               47,226    42,679 

Decrease in provisions for liabilities and charges – (64,143)
Increase/(decrease) in trade and other payables 221,055 (48,841) Cash
generated from operations

                       433,081   397,401 Interest paid
(171,258) (240,494) 

Net cash generated from operating activities 261,823 156,907
Investing activities Interest received

                                          -         - Acquisition
of goodwill                                    -         - Proceeds from
disposal of subsidiary                 468,946         - Legal costs on
disposal of subsidiary               (11,359)         - 

Purchases of property, plant and equipment (54,981) (36,974) Net
cash generated from/(used in) investing activities

                                           402,606  (36,974)
Financing activities Proceeds from issue of share capital
93,750   107,142 Premium on issue
56,250    42,857 Decrease in borrowings
(375,245) (172,441) 

Repayment

 of obligations under finance lease (61,337) (68,933) Net
cash used in financing activities

              (286,582)  (91,375) 

Net cash generated from
continuing operations

Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the
 377,847 28,558

 DISCONTINUED OPERATIONS Net cash from investing activities
-         - Net cash from discontinuing operations                     -
-
Net increase in cash and cash equivalents            377,847    28,558 

Cash and cash equivalents at beginning of year 409,391 380,833

 Cash and cash equivalents at end of year             787,238   409,391 

Disposal of Resilience Technology Corporation

 During the year, the group disposed of the subsidiary Resilience
Technology Corporation. The proceeds are as follows:
                                         [pounds sterling]
Total sales proceeds               500,000 

Less: cash of Resilience disposed (31,054)

                                    468,946 

NOTES TO THE FINANCIAL STATEMENTS

 AT 30 SEPTEMBER 2012

The financial year represents the year ended 30 September 2012
(prior financial year ended 30 September 2011). The
consolidated
financial statements

 for the year ended 30 September 2012
comprise

 the
financial statements of the Company and its subsidiaries
(‘Group’).

1. GOING CONCERN

 As set out on page 22, the Group recorded a loss of [pounds
sterling]102,532 including an operating profit on existing businesses
(before restructuring costs and finance costs) of [pounds
sterling]351,924. The steps that the Directors have taken have returned
the Group to profitability and they are confident the Group is able to
generate positive cash flow from operations going forward, especially
taking into account the acquisition of Enables IT Limited since the year
end. 

The Directors therefore believe that the Group has adequate
resources to continue in operational existence in the
foreseeable
  
tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees
To see or know beforehand:
 future
and as such have prepared the financial statements on the going concern
basis.

2. PRINCIPAL ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have been
consistently applied to all years presented, unless otherwise
stated.

Basis of accounting

The financial statements have been prepared in
accordance

 with EU
Endorsed
International Financial Reporting Standards

 and
IFRIC

 interpretations (
IFRS

IFRS Inter Frame Relay Service
IFRS Indiana Facilities Registry System
) and the Companies Act 2006 applicable to
companies reporting under IFRS. The financial statements have been
prepared under the historical cost convention.

Judgements and estimates

The Group makes judgements and assumptions concerning the future
that impact the application of policies and reported amounts. The
resulting accounting estimates calculated using these judgements and
assumptions will, by definition, seldom equal the related actual results
but are based on historical experience and expectations of future
events. The judgements and key sources of
estimation

 uncertainty that
have a significant effect on the amounts recognised in the financial
statements are discussed below.

Goodwill
impairment

 

 The Group is required to assess whether goodwill has suffered any
impairment loss, based on the recoverable amount of its cash generating
units (CGUs). The recoverable amounts of the CGUs have been determined
based on value in use calculations and these calculations require the
use of estimates in relation to future cash flows and suitable discount
rates. Actual outcomes could vary from these estimates. 

Impairment of assets

Financial and non-financial assets including other
intangibles
, or one that is lacking physical existence, such as good will.
 are
subject to impairment reviews based on whether current or future events
and
circumstances

 suggest that their recoverable amount may be less than
their
carrying value

. Recoverable amount is based on a calculation of

expected future cash flows

 which includes management assumptions and
estimates of future performance.

 If there is an indication that impairment exists, the recoverable
amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where the asset does not generate cash flows
that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which this asset
belongs. An intangible asset with an indefinite useful life is tested
for impairment annually and whenever there is an indication that the
asset may be impaired.
Recoverable amount is the higher of the fair value less costs to sell
and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money
and the risks specific to the asset for which the estimates of the
future cash flows have not been adjusted. 

If the recoverable amount of an asset (or
CGU

CGU Claremont Graduate University
CGU Chang Gung University
CGU Canadian Geophysical Union
) is estimated to be
less than its carrying amount, the carrying amount of the asset (CGU) is
reduced to its recoverable amount. An impairment loss is recognised as
an expense immediately, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss is treated as a

revaluation

 decrease.

 Where an impairment loss subsequently reverses, the carrying amount of
the asset (CGU) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss
been recognised for the asset (CGU) in prior years. A reversal of an
impairment loss is recognised as income immediately unless the relevant
asset is carried at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.
New standards adopted early 

At the date of the authorisation of the financial statements, no
standards and interpretations, which are issued but not yet effective,
have been adopted early.

New standards and interpretations not yet adopted

At the date of the authorisation of the financial statements, the
following standards, and interpretations, which are issued but not yet
effective, have not been applied:

Effective for the Group for future financial years:

Amendment to
IAS

 12 ‘Accounting for Taxes on Income (effective
date year beginning 1
January
 see month.
 2012)

Amendment to IAS 36 ‘Impairment of Assets’ (effective date
year beginning 1 January 2012)

Amendment to IAS 1 ‘Presentation of Financial Statements’
(effective date year beginning 1
July
 see month.
 2012)

Amendment to IFRS 1 ‘First-time Adoption of International
Financial Reporting Standards’ (effective date year beginning 1
January 2013)

Amendment to IFRS 7 ‘Financial Instruments: Disclosures’
(effective date year beginning 1 January 2013)

Re-issue of IFRS 9 ‘Financial Instruments’ (effective date
year beginning 1 January 2013)

Amendment to IFRS 10 ‘Consolidated Financial Statements’
(effective date year beginning 1 January 2013)

Amendment to IFRS 11 ‘Joint Arrangements’ (effective date
year beginning 1 January 2013)

Amendment to IFRS 12 ‘Disclosure of Interests in Other
Entities’ (effective date year beginning 1 January 2013)

IFRS 13 ‘Fair Value Measurement’ (effective date year
beginning 1 January 2013)

Amendment to IAS 1 ‘Presentation of Financial Statements’
(effective date year beginning 1 January 2013)

Amendment to IAS 16 ‘Property , Plant and Equipment’
(effective date year beginning 1 January 2013)

Amendment to IAS 19 ‘Employee Benefits’ (effective date
year beginning 1 January 2013)

Reissued IAS 27 ‘Separate Financial Statements’ (effective
date year beginning 1 January 2013)

Reissued IAS 28 ‘Investments in Associates and Joint
Ventures’ (effective date year beginning 1 January 2013)

Amendment to IAS 32 ‘Financial Instruments: Presentation’
(effective date year beginning 1 January 2013)

Amendment to IAS 34 ‘Interim Financial Reporting’
(effective date year beginning 1 January 2013)

IFRIC 20 ‘Stripping Costs in the Production Phase of a Surface
Mine’ (effective date year beginning 1 January 2013)

Amendment to IAS 32 ‘Financial Instruments: Presentation’
(effective date year beginning 1 January 2014)

Amendment to IFRS 7 ‘Financial Instruments: Disclosures’
(effective date year beginning 1 January 2015)

Amendment to IFRS 9 ‘Financial Instruments’ (effective
date year beginning 1 January 2015)

 The Group has considered the above new standards, interpretations and
amendments to published standards that are not yet effective and
concluded that except for the amendments to IAS 1 'Presentation of
Financial Statements' and IFRS 10 'Consolidated Financial
Statements', they are either not relevant to the Group or that they
would not have a significant impact on the Group's financial
statements. 

New standards adopted during the year

In the current period, the Group has adopted all of the new and
revised Standards and Interpretations issued by the International
Accountancy Standards Board (the
IASB

See International Accounting Standards Board (IASB).
) and the International Financial
Reporting Interpretations Committee (the IFRIC) of the IASB that are
relevant to its operations and effective for reporting dates beginning
on 1
October
 see month.
 2011.

Basis of consolidation

The Group accounts
consolidate

 the accounts of Enables IT Group plc
and all its subsidiary undertakings drawn up to 30 September each year.
No income statement is presented for Enables IT Group plc as permitted
by section 408 of the Companies Act 2006.

 The results of any subsidiaries acquired during the year are included
in the consolidated income statement from the date on which control is
transferred to the Group. Control exists when the Group has the power,
directly or indirectly, to govern the financial and operating policies
of an entity so as to obtain benefits from its activities. They are
deconsolidated from the date that control ceases.
The acquisition of subsidiaries is accounted for using the purchase
method. The cost of an acquisition is measured at the aggregate of the
fair value, at the date of exchange, of assets given, liabilities
incurred or assumed and equity instruments issued by the Group in
exchange for control of the acquiree, plus any costs directly
attributable to the business combination. The acquiree's
identifiable assets, liabilities and contingent liabilities that meet
the conditions under IFRS3 are recognised at their fair value at the
acquisition date. 

Goodwill arising on acquisition is recognised as an asset and
initially measured at cost, being the excess of the cost of the business
combination over the Group’s interest in the net fair value of the
identifiable assets, liabilities and
contingent

 liabilities
recognised.

Where necessary, adjustments are made to the financial statements of
subsidiaries and associates to bring accounting policies used in line
with those used by the Group.

All intra-Group transactions, balances, income and expenses are
eliminated on consolidation.

Revenue recognition

Revenue is taken on fee income in the year to which it relates.
Project income is recognised in the year in which the project is worked
on. For projects which fall over the financial year end income is
recognised to reflect the partial performance of the contractual
obligations.

The income from annual maintenance contracts is recognised in equal
instalments over the period to which the service is provided. The income
from product sales is recognised at the date of shipment.

Goodwill policy

Goodwill represents the excess of the cost of an acquisition over
the fair value of the Group’s share of the identifiable assets and
liabilities of the acquired subsidiary at the date of acquisition.

Goodwill impairment

Goodwill is tested annually for impairment and carried at cost less

accumulated
  
v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates

v.tr.
To gather or pile up; amass. See Synonyms at gather.

v.intr.
To mount up; increase.
 impairment losses. (Any impairment charge is recognised in
the income statement in the year in which it occurs.) Impairment losses
on goodwill are not reversed. Gains and losses on the disposal of an
entity include the carrying amount of goodwill
relating to
 relate prep

 relate prep → ,  
 the entity
sold.

 Goodwill is allocated to cash-generating units for the purpose of
impairment testing. The allocation is made to those cash-generating
units or Groups of cash-generating units that are expected to benefit
from the business combination in which the goodwill arose. Goodwill is
allocated to cash-generating units that represent each business segment.

Impairment of property, plant and equipment and intangible
assets

 At each balance sheet date, the Group reviews the carrying amounts of
its property, plant & equipment and intangible assets to determine
whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount
of the asset, which is the higher of its fair value less costs to sell
and its value in use, is estimated in order to determine the extent of
the impairment loss. Where the asset does not generate cash flows that
are independent from other assets, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs. 

Any impairment charge is recognised in the income statement in the
year in which it occurs for assets carried at cost if recoverable amount
is less than the carrying value. Where an impairment loss, other than an
impairment loss on goodwill, subsequently reverses due to a change in
the original estimate, the carrying amount of the asset is increased to
the
revised estimate

 of its recoverable amount.

Investments

 Available for sale investments are non-derivatives that are either
designated in this category or not classified in any of the other
categories. They are included in non-current assets unless management
intends to dispose of the investment within 12 months of the balance
sheet date.
Available for sale investments are initially recognised at fair value
plus transaction costs. After initial recognition, available for sale
investments are measured at fair value, with gains or losses recognised
as a separate component of equity until the investment is derecognised
or until the investment is determined to be impaired, at which time the
cumulative gain or loss previously reported in equity is included in the
income statement.
The fair values of investments are based on current bid prices. If the
market for an available for sale investment is not active the Group
establishes fair value by using valuation techniques. These include the
use of recent arm's length transactions, reference to other
instruments that are substantially the same, discounted cash flow
analysis, and option pricing models making maximum use of market inputs
and relying as little as possible on entity-specific inputs. 

Property, plant and equipment

 Property, plant and equipment assets are stated at cost less
accumulated depreciation and impairment losses. Depreciation is
calculated to write down their cost to their estimated residual values
by equal annual instalments over the year of their estimated useful
economic lives, which are considered to be:
Fixtures & Fittings           3 years Office & Computer
Equipment   3 years Short Leasehold Improvements  Over the remaining
term of the lease 

Intangible assets

 Identifiable intangible assets are recognised when the Group controls
the asset, it is probable that future economic benefits attributable to
the asset will flow to the Group and the cost of the asset can be
reliably measured. All intangible assets, other than goodwill and
indefinite lived assets, are amortised over their useful economic life.
The method of amortisation reflects the pattern in which the assets are
expected to be consumed. If the pattern cannot be determined reliably,
the straight line method is used. 

Brand, trade names and customer lists acquired through business
combinations are recorded at fair value at the date of acquisition.
Assumptions are used in estimating the fair values of acquired
intangible assets. These include management’s estimates of revenue
and profits to be generated by the acquired business.

The estimated useful lives of intangible assets are:

Brands and trade names 10 years straight line

Customer lists 10 years straight line

Pension costs

The Group makes defined contributions to its employees’
personal plans. The pension costs charged in the financial statements
represents the contributions payable by the Group during the period.

Leased assets and obligations

 Leases are classified as finance leases when the terms of the lease
transfer substantially all the risks and rewards of ownership to the
Group. All other leases are classified as operating leases. For property
leases, the land and building elements are treated separately to
determine the appropriate lease classification.
Finance leases
Assets funded through finance leases are capitalised as property, plant
and equipment and depreciated over their estimated useful lives or the
lease term, whichever is shorter. The amount capitalised is the lower of
the fair value of the asset or the present value of the minimum lease
payments during the lease term at the inception of the lease. The
resulting lease obligations are included in liabilities determined.
Lease payments are apportioned between finance charges and reduction of
the lease obligation so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance costs on finance leases are
charged directly to the income statement.
Operating leases 

Assets leased under operating leases are not recorded on the balance
sheet. Rental payments are charged directly to the income statement on a
straight line basis over the lease term.

Foreign currencies

 Transactions in foreign currencies are translated into Sterling using
the exchange rates prevailing at the date of the transaction. Foreign
exchange gains or losses resulting from the settlement of such
transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are
recognised in the income statement. On consolidation, assets and
liabilities of foreign undertakings are translated into Sterling using
the year end exchange rates. The results of foreign undertakings are
translated into Sterling at average rate of exchange for the year.
Foreign exchange differences arising on retranslation are recognised
directly in equity. 

Current and deferred taxation

Current tax is the expected tax payable on taxable income for the
year, using tax rates enacted or
substantively
  
adj.
1. Substantial; considerable.

2. Independent in existence or function; not subordinate.

3. Not imaginary; actual; real.

4.
 enacted at the balance
sheet date, and any adjustments to tax payable in respect of previous
years.

Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the

computation

 of taxable profits (‘temporary differences’) and
is accounted for using the balance sheet liability method.

Deferred tax liabilities are generally recognised for all taxable
temporary differences. Where there are taxable temporary differences
arising on subsidiaries, deferred tax liabilities are recognised.

 Deferred tax assets are generally recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Where there are deductible
temporary differences arising on subsidiaries, deferred tax assets are
recognised only where it is probable that they will reverse in the
foreseeable future and taxable profits will be available against which
the temporary differences can be utilised. 

The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer

probable

 that sufficient tax profits will be available to allow all or
part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised.

Deferred tax is charged or credited to the income statement, except
when it relates to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in equity.

Share based payments

The Group has applied the requirements of IFRS 2 ‘Share-Based
Payments’. In accordance with the transitional provisions, IFRS 2
has been applied to all grants of equity instruments after 7
November
 see month.
 2002 that were unvested as of 1 January 2005.

 The Group issues equity-settled share-based payments to certain
employees, including share options with non-market based vesting
conditions. Equity-settled share-based payments are measured at fair
value at the date of grant. The fair value determined at the grant date
of the equity-settled share-based payment is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of
shares that will eventually vest.

Fair value is measured by use of a Black-Scholes model for the
majority of share options in issue. The expected life used in the model
has been adjusted, based on management’s best estimate, for the
effects of non-transferability, exercise restrictions, and
behavioural

 considerations.

Financial Instruments

Financial assets

 and financial liabilities are recognised on the
Group’s balance sheet when the Group has become party to the
contractual provisions of the instrument.

Trade and other
receivables

 

Trade receivables are stated at fair value. A provision for
impairment is made where there is objective evidence of impairment
(including customers in financial difficulty or seriously in default
against agreed payment terms). There is no material
variance

 between
carrying and fair values.

Inventories

 Inventories are valued at the lower of cost or net realisable value.
The directors carry out an annual valuation of inventories. The cost of
any inventories that are valued below the current book value is written
off to the income statement. Cost is determined using the average cost
basis. 

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at
call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts. Bank
overdrafts are shown within borrowings in
current liabilities

 on the
balance sheet.

Trade and other payables

Trade payables are recognised at fair value. There is no material
variance between book and fair values.

Borrowings

 Bank loans and overdrafts are recorded initially at their fair value,
net of direct transaction costs and finance charges are recognised in
the income statement over the term of the instrument. Note 18 provides
details of the applicable interest rates. There is no material variance
between book and fair values.
Equity instruments 

Equity instruments are recorded at the proceeds received, net of
direct issue costs.

3. DISPOSAL OF SUBSIDIARY

During the year, the group disposed of Resilience Technology
Corporation. The details of the disposal are:

                                                       2012
                                                                Total
                                                        [pounds
sterling]           [pounds sterling]
Disposal proceeds                                             500,000
Net assets and liabilities disposed of Cash and cash equivalents
31,054 Fixed assets                                        5,675
Inventories                                       413,837 Trade and
other receivables                        87,642 Trade and other payables
(1,362,143)
                                                              823,935
Goodwill and intangible assets written off                (1,265,077)
Legal costs                                                  (11,358)
Exchange loss                                                (13,870)
Reported profit on disposal                                    33,630 

4. BUSINESS AND
GEOGRAPHICAL
   also ge·o·graph·i·cal
adj.
1. Of or relating to geography.

2. Concerning the topography of a specific region.


ge
 SEGMENTS

 The segment reporting format is determined to be the geographical
segments as the Group's risk and rates of return are affected
predominately by the location of its customers. The Group has two main
geographical segments, namely the USA and Europe. 

The segment results for the year ended 30 September 2012 are as
follows:

                                           Europe       USA Inter-Group 

Continuing Disconti-
Consolidated
  
v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates

v.tr.
1. To unite into one system or whole; combine:
 

                                                               trading operations       nued
                                                                                   operations Year ended 30 September 2012
[pounds sterling]         [pounds sterling]           [pounds sterling]
[pounds sterling]          [pounds sterling]            [pounds
sterling]
Revenue Segmental revenue - external           1,522,267 2,751,347
-  4,273,614  1,525,865    5,799,479 Segmental revenue - internal
191,834         -   (191,834)          -          -            - Total
segmental revenue                1,714,101 2,751,347   (191,834)
4,273,614  1,525,865    5,799,479
Operating profit                         307,830    44,094           -
351,924    275,169      627,093
Restructuring costs                                                     (263,552)          -    (263,552) Acquisition costs re Enables IT
Limited                                                                 (265,000)          -    (265,000) Amortisation of intangible assets
  -   (38,477)     (38,477) Share based payments
(1,795)          -      (1,795) Foreign currency translation
(24,584)      1,411     (23,173) Finance costs
(62,470)  (108,788)    (171,258) Profit on disposal of subsidiary

– 33,630 33,630

 (Loss)/profit for the year

(265,477) 162,945 (102,532)

 Year ended 30 September 2011
 Revenue Segmental revenue - external           1,444,386 2,681,048
-  4,125,434  1,777,704    5,903,138 Segmental revenue - internal
280,531         -   (280,531)          -          -            - Total
segmental revenue                1,724,917 2,681,048   (280,531)
4,125,434  1,777,704    5,903,138
Operating profit                         128,375   153,260           -
281,635    114,576      396,211
Amortisation of intangible assets
-  (271,619)    (271,619) Share based payments
(26,681)          -     (26,681) Foreign currency translation
9,976     18,121       28,097 Finance income
-          -            - Finance costs
(96,244)  (144,250)    (240,494)
Loss for the year                                                         168,686  (283,172)    (114,486)
Revenues from one customer of the Group amounted to more than 10% of the
Group's total revenue. The total revenues from this customer are
detailed below, by segment:
                                                2012      2011
                                                   [pounds sterling]
[pounds sterling] Revenue - Europe                             746,110
723,980 Revenue - USA                              1,402,737 1,421,490
                                           2,148,847 2,145,470 

Segmental
 /seg·men·tal/ ()
1. pertaining to or forming a segment or a product of division, especially into serially arranged or nearly equal parts.

2. undergoing segmentation.
 Analysis of the Balance Sheet

                                      Europe         USA Inter-Group  

Continuing
Discontinued
  
v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues

v.tr.
1. To stop doing or providing (something); end or abandon:
 Consolidated

                                                           balances  operations   operations Year ended 30 September 2012
[pounds sterling]           [pounds sterling]           [pounds
sterling]           [pounds sterling]            [pounds sterling]
[pounds sterling]
 Additions to non-current assets       2,659      47,343           -
50,002        4,979       54,981
Depreciation                        (6,597)    (83,916)           -
(90,513)      (3,327)     (93,840) Impairment
-           -           -           -            -            -
Amortisation                              -           -           -
-     (38,477)     (38,477)
Segment assets                    1,826,152     394,522   (882,803)
1,337,871            -    1,337,871
Segment liabilities             (1,400,970)   (598,268)     882,803
(1,116,435)            -  (1,116,435)  

Year ended 30 September 2011

 Additions to non-current assets       3,448      33,526           -
36,974            -       36,974
Depreciation                        (6,397)   (104,773)           -
(111,170)            -    (111,170) Impairment
-           -           -           -            -            -
Amortisation                              -   (271,619)           -
(271,619)            -    (271,619)
Segment assets                    3,205,488   2,275,652 (2,635,452)
2,845,688            -    2,845,688
Segment liabilities             (1,109,676) (4,205,212)   2,635,452
(2,679,436)            -  (2,679,436) 

5. EXPENSES AND AUDITOR’S
REMUNERATION

 

The Group’s results include charges/(credits) for the
following:

                                                                        2012    2011
                                                                      Total   Total
                                                                          [pounds sterling]       [pounds sterling]
Depreciation on tangible fixed assets owned
39,410

40,909

 Depreciation on tangible fixed assets held under finance lease
       51,103  70,261 Auditor's remuneration
44,000  44,750 Operating lease costs
137,327 201,044
 Exceptional items: Share based payment
1,795  26,681 Restructuring costs
263,552       - Committed acquisition costs re Enables IT Limited
              265,000

Net loss/(profit) on foreign currency translation
24,584
 (9,976)
Total Exceptional items
554,931  16,705  

The loss attributable to the parent company profit and loss account
for the year was [pounds sterling]1,846,950 (2011: profit [pounds
sterling]78,843).

Auditor’s remuneration

The fees charged by the
auditors

 can be further analysed under the
following headings for services rendered:

                                                                                         2012   2011
                                                                                           [pounds sterling]      [pounds sterling] Audit
services
                                  Fees payable to Company auditor for
the audit of
                                  parent
                                  Company and consolidated accounts
14,000 15,500 Non-audit services Fees payable to the Company's
auditor and its associates for other services:
                                  The audit of Company's
subsidiaries pursuant to
                                  legislation
20,000 23,500
                                  Tax compliance and advisory services
10,000  5,750
                                  Fees relating to the acquisition of
Enables IT
                                  Limited
60,000      -
                                                                                     104,000 44,750
6. NET FINANCE COSTS
                                                       2012   2011
                                                          [pounds
sterling]      [pounds sterling] Finance Expense Interest on finance
lease                             9,019 14,702 Interest on other
borrowings                         53,451 81,542
                                                     62,470 96,244
7. TAXATION
                                                           2012   2011
i) Current tax charge                                         [pounds
sterling]      [pounds sterling] The tax charge comprises: UK taxation
      Corporation tax at 24.00% (2011: 27.00%)                -      -

Non-UK taxation

      Current                                                 -
-
                                                               -      - 

Deferred taxation

Origination

 and
reversal
 n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its
 of temporary differences – –

                                                               -      - 

ii) Tax reconciliation

 The taxation expense on the loss for the year differs from the amount
computed by applying the corporation tax rate to the loss before tax for
the following reasons:
                                                               2012
2011
                                                                  [pounds sterling]         [pounds sterling]
Loss on ordinary activities before tax                    (102,532) 

(114,486)

 Theoretical tax charge at 24.00% (2011: 27.00%)            (24,607)  

(30,911)

 Effects of: Expenses (including goodwill) not deductible for tax
69,263     8,566 purposes Capital allowances less than depreciation
10,957     3,312 Other timing differences
38,913 Accounting profit on disposal
(8,071)         -
 Adjustments in respect of prior periods
- Utilisation of tax losses                                  (63,594)
(52,023) Unrelieved losses c/f
16,052    32,143
Total tax charge for the year                                     -
- 

Factors that may affect future tax charges

At 30 September 2012 the Group has tax losses of
approximately
  
adj.
1. Almost exact or correct:

2.
 [pounds sterling]560,808 (2011: [pounds sterling]2,112,463) to set
against future profits of the same trade.

 A deferred tax asset of [pounds sterling]129,954 (2011: [pounds
sterling]564,932) arising from the tax losses in place has not been
recognised. Although the directors ultimately expect sufficient taxable
profits to arise, there is currently insufficient evidence to support
the recognition of a deferred tax asset in these financial statements.
8. LOSS PER SHARE
Basic 

Basic profit/(loss) per share is calculated by dividing the loss
attributable to equity holders of the Group by the weighted average
number of ordinary shares in issue during the year.

Diluted
  
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.

2. To lessen the force, strength, purity, or brilliance of, especially by admixture.
 

 The weighted average number of the Group's ordinary shares used in
the calculation of diluted earnings per share has been adjusted for the
effect of potentially dilutive share options granted under the
Group's share option schemes. (Potentially dilutive share options
are options with an exercise price less than the middle market price at
30 September 2012).
                              2012                                  2011
                      Loss                                  Loss
              attributable      Weighted            attributable
Weighted
                 to equity       average               to equity
average
                holders of     Number of       Loss   holders of
Number of       Loss
                the parent        shares  per share   the parent
shares  per share
                         [pounds sterling]
[pounds sterling]            [pounds sterling]
[pounds sterling]
Basic EPS calculation      (102,532) 1,179,441,929 (0.000087)
(114,486) 1,115,518,105 (0.000102) Effect of dilutive options
295,712,646                           424,106,019

Diluted
EPS

 calculation (102,532) 1,475,154,575 (0.000087) (114,486)
1,539,624,124 (0.000102)

 Discontinued operations basic and diluted EPS
162,945 1,179,441,929   0.000138    (283,172)

1,115,518,105 (0.000254)

In the current year the Group has made a loss and the potential
share options are therefore anti-dilutive.

 Potential dilutive items
                                                    2012        2011
                                               Weighted    Weighted
                                                average     average
                                              Number of   Number of
                                                 shares      shares
Loan note 1 (see note 18)                                     93,750,000
93,750,000
Loan note 2 (see note 18)                                      6,250,000
43,750,000 Share options (see note 20)
195,712,646 286,606,019
                                            295,712,646 424,106,019 

As the current year shows a loss, the other potential dilutive items
are anti-dilutive and therefore do not alter the EPS calculations.

9. PROPERTY, PLANT AND EQUIPMENT

                                       Short              Office and
                                  leasehold Fixtures and   computer
Group                          improvements     fittings  equipment
Total
                                          [pounds sterling]
[pounds sterling]          [pounds sterling]         [pounds sterling]
Cost At 1 October 2010                   415,575       52,992    927,686
1,396,253 Additions                                 -        1,155
35,819    36,974 Disposals                                 -
-          -         - Currency exchange adjustment
4,893          408     11,606    16,907 At 1 October 2011
420,468       54,555    975,111 1,450,134 Additions
2,157          886     51,938    54,981 Disposals
-      (4,987)   (23,046)  (28,033) Currency exchange adjustment
(14,074)        (957)   (32,278)  (47,309) At 30 September 2012
408,551       49,497    971,725 1,429,773
Accumulated depreciation At 1 October 2010                   172,490
42,981    799,303 1,014,774 Provided in the year                 27,972
5,633     77,565   111,170 Disposals                                 -
-          -         - Currency exchange adjustment
2,812          400     11,318    14,530 At 1 October 2011
203,274       49,014    888,186 1,140,474 Provided in the year
26,342        4,865     62,633    93,840 Disposals
-      (4,987)   (17,048)  (22,035) Currency exchange adjustment
(7,430)        (935)   (29,930)  (38,295) At 30 September 2012
222,186       47,957    903,841 1,173,984
Net Book Value At 30 September 2012                186,365        1,540
67,884   255,789 At 30 September 2011                217,194
5,541     86,925   309,660 At 30 September 2010                243,085
10,011    128,383   381,479 

Included in the total net book value of [pounds sterling]255,789 is
[pounds sterling]78,718 (2011: [pounds sterling]128,522) in respect of
assets held under hire purchase agreements. The categories of these
assets are short
leasehold
 n.
 improvements of [pounds sterling]48,716 and
computer and office equipment of [pounds sterling]30,002.

 . 

The depreciation charged to the Income Statement in the year in
respect of such assets is [pounds sterling]51,103 (short leasehold
improvements of [pounds sterling]4,117 and computer and office equipment
of [pounds sterling]46,986 (2011: [pounds sterling]70,261).

The Company had no property, plant and equipment.

 10. goodwill
                      Goodwill on Purchased Group
consolidation  Goodwill     Total
                                [pounds sterling]         [pounds
sterling]         [pounds sterling] Cost At 1 October 2010
641,137   661,025 1,302,162 Currency exchange               -     7,785
7,785 adjustment Additions                       -         -         -
Disposals                       -         -         -
At 1 October 2011         641,137   668,810 1,309,947 Disposals
- (668,810) (668,810)
At 30 September 2012                      641,137         -   641,137
Impairment At 1 October 2010         641,137         -   641,137
Impairment charge               -         -         - Disposal
-         -         - At 1 October 2011         641,137         -
641,137
At 30 September 2012                      641,137         -   641,137
Net book value At 30 September 2012                            -
-         - At 30 September 2011                            -   668,810
668,810 At 30 September 2010                            -   661,025
661,025
                                          Group
                                         2012      2011
Resilience Technology Corporation           -   668,810
                                            -   668,810
11. INTANGIBLE ASSETS
                                                            Customer
Group                                                           List
Total
                                                                   [pounds sterling]                 [pounds sterling] Cost At 1 October 2010
1,072,555         1,072,555 Currency exchange
10,628            10,628 adjustment Additions Disposals
 -                 - At 1 October 2011
1,083,183         1,083,183 Currency exchange
-            10,628 adjustment Disposals
(1,083,183)       (1,083,183) At 30 September 2012
-                 -
Amortisation At 1 October 2010
169,773           169,773 Currency exchange adjustment
7,881             7,881 Provided in the year
271,619           271,619 At 1 October 2011
449,273           449,273 Currency exchange adjustment
-                 - Provided in the year
38,477            38,477 Disposals
(487,750)         (487,750) At 30 September 2012
-                 -
Net book value At 30 September 2012
-                 - At 30 September 2011
633,910           633,910 At 30 September 2010
902,482           902,482
                                        Group
                                      2012      2011
                                         [pounds sterling]
[pounds sterling]  

Resilience Technology Corporation – 633,910

                                          -   633,910 

12. non current ASSET INVESTMENTS

 Group                                            Available-for-sale investments  Total
                                                                               [pounds sterling]      [pounds sterling]
At 1 October 2010                                                             -      - Additions
-      - Exchange adjustments
-      - Impairment of investment
-      - Transfer                                                                      -      - Revaluation
-      - At 1 October 2011
-      - Additions                                                                     -      - Exchange adjustments
-      - Impairment of investment
-      - At 30 September 2012
-      -
                                             Available-for-
                                  Subsidiary           sale Company
Undertakings    investments    Total
                                           [pounds sterling]
[pounds sterling]        [pounds sterling]
At 1 October 2010                    362,220              -  362,220
At 1 October 2011                    362,220              -  362,220
At 30 September 2012                 362,220              -  362,220 

The Company directly owns 100% of the issued share capital of the
following subsidiary undertakings, which have been included in the
consolidated financial statements:

Subsidiary undertaking Country of registration Principal activity
Enables IT (UK) Limited
England and Wales

 

            IT Support services FixIT Worldwide Limited England
and Wales            IT Support services PC Medics Group Limited England
and Wales            Holding Company Nexus Management Inc *  USA
IT Support services 

* Investment held via PC
Medics

n. 1. Science of medicine.
 Group Limited

 The Company owned 14.78% of the ordinary issued share capital of PD
Financial, a company incorporated in the USA, as at 30 September 2012.
PD Financial's principal activity is direct marketing. PD Financial
has now ceased actively trading. In the directors' opinion this
investment currently has no value.
13. INVENTORIES
                                                                                          Group
                                                                       2012                   2011
                                                                          [pounds sterling]                      [pounds sterling]
Raw Materials                                                             -                301,837 DX Units
-                111,104 Total Inventories
-                412,941  

All inventories were held by Resilience Technology Corporation and
were disposed of during the year ended 30 September 2012. Raw materials
recognised as cost of sales amounted to [pounds sterling]Nil (2011:
[pounds sterling]224,405). There has been no write down of inventories
to net realisable value in 2012 (2011: [pounds sterling]Nil).

The company had no inventories at 30 September 2012.

14. TRADE AND OTHER RECEIVABLES

                                         Group            Company
                                       2012    2011    2012      2011
                                          [pounds sterling]
[pounds sterling]       [pounds sterling]         [pounds sterling]
Trade receivables                   122,663 268,276       -    25,125

Amounts owed by Group undertakings – – 480,446 2,326,537
VAT

See value-added tax (VAT).
 recoverable

                           -       -  27,265     3,641 Other
receivables                    91,024  25,130       -         - 

Prepayments

 and
accrued
  
v. ac·crued, ac·cru·ing, ac·crues

v.intr.
1. To come to one as a gain, addition, or increment:

2.
 income 81,157 117,570 100,074 29,245

                                     294,844 410,976 607,785 2,384,548 

Included in the Company total above is [pounds sterling]480,446
(2011: [pounds sterling]2,326,537) relating to debtors due after more
than one year.

There is no material variance between carrying and fair values.

15. TRADE AND OTHER PAYABLES

                                    Group             Company
                                 2012      2011     2012     2011
                                    [pounds sterling]         [pounds
sterling]        [pounds sterling]        [pounds sterling]
Trade payables                 60,039   830,325   22,679   12,503 Other
payables                 83,537   150,117        -        -

Accruals

 and deferred income 555,385 840,869 501,071 42,916

                               698,961 1,821,311  523,750   55,419 

Included within Other payables for the Group total above is [pounds
sterling]Nil (2011: [pounds sterling]68,688) relating to amounts falling
due after more than one year.

There is no material variance between carrying and fair values.

16. LOANS AND OTHER BORROWINGS

                                                 Group
Company
                                              2012      2011     2012
2011
                                                 [pounds sterling]
[pounds sterling]        [pounds sterling]        [pounds sterling]
Bank loans                                       -    59,200        -
- Other loans                                355,293   676,923  355,293
545,293
                                           355,293   736,123  355,293
545,293 Disclosed within current liabilities             - (206,362)
- 

(40,000)

Disclosed
  
tr.v. dis·closed, dis·clos·ing, dis·clos·es
1. To expose to view, as by removing a cover; uncover.

2. To make known (something heretofore kept secret).
 as non-current liabilities 355,293 529,761 355,293
505,293

The borrowings are
repayable
  
v. re·paid , re·pay·ing, re·pays

v.tr.
1. To pay back:

2.
 as follows:

                                                   Group
Company
                                               2012      2011     2012
2011
                                                 [pounds sterling]
[pounds sterling]        [pounds sterling]        [pounds sterling]
On demand or within one year                     -   206,362        -
40,000

In the second to fifth years
inclusive

 355,293 529,761 355,293
505,293

                                            355,293   736,123  355,293  

545,293

 Less: Amount due for settlement within 12 months (shown under
current liabilities)         - (206,362)        - (40,000) Amount due
for settlement after 12 months  355,293   529,761  355,293  505,293 

Included within other loans is an amount of [pounds sterling]Nil
(2011: [pounds sterling]5,760) relating to the trade and asset
acquisition of Resilience Technology Corporation.

Bank overdrafts and loans are arranged at floating rates, exposing
the Group to cash flow interest rate risk.

The weighted average interest rates paid were as follows: 2012
2011

                                                                 %
%
Bank loans                                                      -
9.63 

Sensitivity analysis on the level of interest rates has not been
undertaken as the Directors believe that any increase/decrease in
interest rates during the current and previous year would have had no
material impact on the level of interest payable.

The other principal features of the Group’s borrowings are as
follows:

The Group has two loans taken out in previous years.

(i) Convertible loan notes of [pounds sterling]375,000, convertible
no later than 2015. The rate of interest is 10% p.a.

(ii) Convertible loan notes of [pounds sterling]25,000, convertible
no later than 2015. The rate of interest is 10% p.a.

17. NET OBLIGATIONS UNDER FINANCE LEASES

                                                                  Present value of lease Group                                    Minimum lease
payments         payments
                                                2012        2011
2012        2011
                                                   [pounds sterling]
[pounds sterling]           [pounds sterling]           [pounds
sterling] Amounts payable under finance lease Within one year
44,824      70,383      44,824      70,383 In the second to fifth years
inclusive        21,785      64,103      21,785      64,103
                                              66,609     134,486
66,609     134,486 Less: Future finance charges                 (4,428)
(12,484)     (4,428)    (12,484) Present value of lease obligations
62,181     122,002      62,181     122,002 Less: Amount due to
settlement within 12 months (shown under current liabilities)
(41,263)    (61,806)    (41,263)    (61,806) Amount due to be settled
after 12 months      20,918      60,196      20,918      60,196 Net
obligations under finance leases contracts are secured on the assets
concerned. 

The main finance leases within the Group are:

Desktop PC’s and laptops for Nexus Management Inc. The lease,
which was for 32 replacement PC’s and laptops, commenced in 2012. A
monthly rental of [pounds sterling]194 is payable over 36 months, with
an option to purchase at a
nominal

 amount after 36 months.

 Addition to the "High availability virtual environment"
(HAVEN) for Nexus Management Inc. The lease commenced in 2011. A monthly
rental of [pounds sterling]1,601 is payable over 36 months, with an
option to purchase at a nominal amount after 36 months. The "High
availability virtual environment" contains five servers and storage
units that house the virtual server. Nexus Management Inc. offer HAVEN
as a remote storage or virtual server product to its clients. 

High availability

 virtual environment for Nexus Management Inc. The
lease commenced in 2010. A monthly rental of [pounds sterling]2,371 is
payable over 36 months, with an option to purchase at a nominal amount
after 36 months.

HVAC

 
Air conditioning
 mechanical process for controlling the humidity, temperature, cleanliness, and circulation of air in buildings and rooms. Indoor air is conditioned and regulated to maintain the temperature-humidity ratio that is most comfortable and healthful.
 system for Nexus Management Inc. The lease
commenced in 2009. A monthly rental of [pounds sterling]1,349 is payable
over 60 months, with an option to purchase at a nominal amount after 60
months.

Company

 Amounts payable under finance leases in the company are [pounds
sterling]nil (2011 [pounds sterling]nil).
18. SHARE CAPITAL
                                                                 Group
Company
                                                                 2012
2011       2012       2011
                                                                    [pounds sterling]                  [pounds sterling]          [pounds
sterling]          [pounds sterling] Authorised 4,000,000,000 (2011:
4,000,000,000) Ordinary shares of [pounds sterling]0.0025 each
10,000,000     

10,000,000 10,000,000 10,000,000

 Allotted, called up and fully paid 1,179,851,765 (2011:1,142,351,765)
Ordinary shares of [pounds sterling]0.0025
2,949,630     

2,855,880 2,949,630 2,855,880

 Shares to be issued Nil (2011: Nil) Ordinary shares of [pounds
sterling]0.0025 -                          -
              -          -
                                                                                             No. of          [pounds sterling]
                                                                                             shares

Reconciliation –
Allotted
  
tr.v. al·lot·ted, al·lot·ting, al·lots
1. To parcel out; distribute or apportion:

2.
, called up and fully paid

At 1 October 2011
1,142,351,765  2,855,880 Shares issued in the year:
 Consideration for acquisition 0.40p per share
             37,500,000     93,750
At 30 September 2012
1,179,851,765  2,949,630
Share option schemes
On 6 April 2001 the Company adopted an Enterprise Management Incentive
Scheme. As set out below during the year the Company did not grant any
options (2011: 16,500,000 options). Due to the value of these options or
the tax status of the recipients, none of these options will be treated
as if they were issued under an unapproved share option scheme. No
provision is made for National Insurance on the options, which are
exercisable at the balance sheet date due to a joint election in place
between the Company and the individual under which the individual has
agreed to take on the Company's National Insurance liability. 

Details of the number of share options and the weighted average
exercise price (
WAEP
 
) outstanding during the year are as follows:

                                                 2012               2011
                                                       WAEP
WAEP
                                               Number Pence       Number
Pence
Outstanding at the beginning of the year  286,606,019 0.63p  297,672,007
0.63p Granted during the year                             - 0.40p
16,500,000 0.40p Exercised during the year                           -
-            -     - Lapsed during the year
(90,893,373) 0.61p (27,565,988) 0.86p

Outstanding at the end of the year 195,712,646 0.63p 286,606,019
0.59p

Exercisable at the end of the year 195,712,646 0.63p 266,272,686
0.61p

The weighted average share price at the date of exercise for share
options exercised during the year was nil (2011: nil).

At 30 September 2012 the following options were granted but not
exercised. Options granted to the directors of the Company are detailed
separately:

i)

3,850,000 options at 0.25p per share exercisable between 31/12/03
and 29/7/13 granted to P J Weller.

ii) 45,881,443 options at 0.6p per share exercisable between 2/8/04
and 1/2/14 granted. The options to directors

      were as follows:
       P J Weller                         1,666,667  

iii) 9,016,394 options at 0.61p per share exercisable between 1/7/04
and 1/2/14 granted. The options to directors

      were as follows:
       P J Weller                         3,278,869  

iv) 28,186,276 options at 0.68p per share exercisable between
9/12/04 and 8/6/14. The options to directors were

      as follows:
       P J Weller                         1,225,490  

v) 1,376,148 options at 1.09p per share exercisable between 1/2/05
and 1/8/14 granted.

vi) 12,865,617 options at 0.75p per share exercisable between
1/10/05 and 17/5/15 granted.

vii) 2,380,953 options at 0.63p per share exercisable between
29/9/05 and 27/4/14 granted.

viii) 38,736,842 options at 0.59p per share exercisable between
18/11/05 and 17/5/15 The options to directors were

      as follows:
       P J Weller                         1,684,211  

ix) 6,000,000 options at 0.49p per share exercisable between 31/5/06
and 31/5/15 granted. The options to

      directors were as follows:
       P J Weller                         2,400,000
x)                  1,200,000 options at 0.64p per share exercisable

between 8/5/06 and 7/11/15 granted.

 xi)                 5,172,414 options at 0.58p per share exercisable 

between 13/10/06 and 12/4/16 granted.

 xii)                3,600,000 options at 0.63p per share exercisable 

between 16/4/07 and 15/10/16 granted.

xii)                347,372 options at 0.75p per share exercisable
between

16/4/07 and 15/10/16 granted.

xiv)                365,854 options at 1.64p per share exercisable
between

1/8/07 and 31/1/17 granted.

                     5,100,000 options at 0.65p per share exercisable
between 3/9/09 and 8/12/18 xv)                 granted.
                    10,000,000 options at 0.81p per share exercisable
between 17/8/09 and 16/2/19 xvi)                granted to P J Weller.
xvii)               13,333,333 options at 0.81p per share exercisable 

between 17/2/10 and 16/2/19

                    granted. The options to directors are as
follows:
                     P J Weller
10,000,000
xviii)              5,000,000 options at 0.40p per share exercisable

between 15/6/11 and 14/6/20 granted

                     3,300,000 options at 0.40p per share exercisable
between 8/3/12 and 7/3/21 granted to P J xix)                Weller. 

The options outstanding at the end of the year have a range of
exercise prices from 0.25p to 1.09p. The estimate fair values of options
granted since 30 July 2003 were calculated using the Black-Scholes

option pricing model

A mathematical formula for determining the price at which an option should trade. The model expresses the value of an option as a function of the value of the underlying asset, length of time until maturity, exercise price, yields on
 with the following inputs and subsequent
assumptions:

Grant date                30 Jul 03 02 Feb 04  02 Feb 04 09 Jun 04
02 Aug 04 28 Apr 05 Share price at grant date 0.0025    0.0053
0.0053    0.0059     0.0095
   0.0055 Exercise price            0.0025    0.0060     0.0061
0.0068     0.0109    0.0063 Number of employees       3         7
7         6          3         3 Shares under option       3,850,000
45,881,443 9,016,394 28,186,276 1,376,148 2,380,953 Vesting period
(years)    0.5       0.5        0.5       0.5        0.5       0.5
Expected volatility       85%       85%        85%       85%        85%
78% Option life (years)       10        10         10        10
10        10 Expected life (years)     10        10         10        10
10        10 Risk free rates           4.60%     4.60%      4.60%
4.60%      4.60%     4.60% Expected dividends        -         -
-         -          -         - Fair value per option     0.0016
0.0034     0.0034    0.0038     0.0061    0.0034
Grant date                18 May 05  18 May 05  31 May 05 08 Nov 05 13
Apr 06 16 Oct 06
Share price at grant date 0.0048     0.0048     0.0043    0.0056
0.0050
  0.0063 Exercise price            0.0075     0.0059     0.0049
0.0064    0.0058    0.0063 Number of employees       40         6
9         5         3         3 Shares under option       12,865,617
38,736,842 6,000,000 1,200,000 5,172,414 2,400,000 Vesting period
(years)    3          0.5        3         3         0.5       0.5
Expected volatility       78%        78%        78%       78%       78%
78% Option life (years)       10         10         10        10
10        10 Expected life (years)     10         10         10
10        10        10 Risk free rates           4.60%      4.60%
4.60%     4.60%     4.60%     4.60% Expected dividends        -
-          -         -         -         - Fair value per option
0.0028     0.0029     0.0026    0.0034    0.0031    0.0039
Grant date                16 Oct 06 16 Oct 06 01 Feb 07 09 Dec 08 17 Feb
09  17 Feb 09
Share price at grant date 0.0063    0.0063    0.0164    0.0056    0.0081
 0.0081 Exercise price            0.0063    0.0075    0.0164    0.0065
0.0081     0.0081 Number of employees       2         1         2
7         3          3 Shares under option       1,200,000 347,372
365,854   5,100,000 10,000,000 13,333,333 Vesting period (years)    3
3         3         3         0.5        3 Expected volatility       79%
77%       79%       66%       65%        65% Option life (years)
10        10        10        10        10         10 Expected life
(years)     10        10        10        10        10         10 Risk
free rates           4.60%     4.60%     4.60%     4.50%     4.50%
4.50% Expected dividends        -         -         -         -
-          - Fair value per option     0.0039    0.0038    0.0103
0.0031    0.0046     0.0046
Grant date                15 Jun 10 8 Mar 11 Share price at grant date
0.0030    0.0033 Exercise price            0.0040    0.0040 Number of
employees       7         5 Shares under option       5,000,000
3,300,000 Vesting period (years)    3         3 Expected volatility
65%       47% Option life (years)       10        10 Expected life
(years)     10        10 Risk free rates           2.50%     2.50%
Expected dividends        -         - Fair value per option     0.0015
0.0013  

No other conditions were included in the fair value
calculations.

 The expected volatility is based on historical volatility over the
expected life period. The expected life of the average expected period
to exercise based on historical experience. The risk free rate of return
is the yield on zero-coupon UK government bonds of a term consistent
with the assumed option life. 

19. POST BALANCE SHEET EVENTS

 In November 2012, the company consolidated its shares at a ratio of
300:1 and a division of the existing ordinary shares of [pounds
sterling]0.0025 in the capital of the Company into new ordinary shares
of [pounds sterling]0.01 each and deferred shares of [pounds
sterling]0.74 each in the capital of the Company.
In November 2012, the Group completed the acquisition of Enables IT
Limited for [pounds sterling]4.25 million consideration, which was
satisfied by the issue of 11,798,475 consideration shares. The Group
acquired 100% of the share capital of Enables IT Limited. The
acquisition constitutes a reverse takeover under the AIM rules. The
legal name of the company was changed to Enables IT Group plc.
20. DIVIDEND 

The Directors have not recommended a dividend.

21. COPIES OF THE REPORT & ACCOUNTS

Copies of the Report and Accounts will be posted to shareholders
shortly, will be available from the Company’s registered office
Unit 5 Mole Business Park, Randalls Road,
Leatherhead
  
n.
See friarbird.
,
Surrey
 county (1991 pop. 997,000), 653 sq mi (1,691 sq km), SE England. The county seat is Guildford. The North Downs cross the county from east to west. To the north the land slopes gently downward to the Thames, into which flow the Wey and the Mole, Surrey’s
 KT22 7BA
and will be available from the Company’s website www.enablesit.com.